tv Nightly Business Report PBS December 6, 2012 4:30pm-5:00pm PST
victory investment. apple didn't say where in the u.s. the line of mac computers would be built or how many jobs might be included. now the return of apple to u.s. manufacturing comes as shareholders have experienced a very rocky ride in the past few months. the stock is down 22% from its all-time high in september. suzanne pratt reports. rtses. >> reporter: a peak inside this manhattan apple store and it looks like everything is a-okay. plenty of customer, plenty of purchases. so why has the shine come off apple's shares? with a-- in a word, actually two, profit-taking. >> i think the biggest reason for the selling going back to when it was priced $700 in september is pure profit-taking. if you look from the beginning year to september, the stock was up 74%. so i think you had some natural profit-taking. >> reporter: but this isn't ode year-end selling by institutions looking to record nice numbers. this supposedly is fiscal cliff related selling as
shareholders worries that capital gains tax rates will be higher next year. >> still, financial planner sharon appleman says selling stock solely for tax reasons isn't the best idea. >> i definitely think it's a legitimate concern and can be an opportunity. and i would say if somebody was interested in reducing a physician any-- position anyway, that can certainly be a great time to do it, you know, why pay higher taxes in a few months time when you can pay a lower tax now. >> reporter: and some analysts say, before unloading the shares, consider that fundamentals for apple haven't really changed. sure, revenue growth may slow and margins may contract, and there are worries the tech giant will have trouble fending off competition from increasingly popular android products. but, to some analysts, the shares look especially cheap today, especially considering their move south since the september high. >> we think the smart phone trend is still in the early to middle innings and is not in the late innings yet. so we think, to the extent that
apple can maintain its share of the premium smart phone market, we think they'll do quite well. throw in ipad and how it's cannibalizing p.c.s, that's another great growth driver. >> reporter: it is worth noting that apple shares are still up more than 30% this year. even with more tax-related selling, it will be tough to take a big bite out of those profits. suzanne pratt, nbr, new york. >> susie: when it comes to new claims for jobless benefits, the effects of super storm sandy appear to be passing. new claims fell by 25,000 in the week ending december 1 to a lower than expected 370,000 requests. that's raising hopes about november's jobs data, which is due out tomorrow. grey, and christmas says u.s. employment firm challenger, grey, and christmas says u.s. companies annnced 57,000 job cuts last month. separately, the number of planned job cuts rose 20% in november from october's levels. on wall street, the dow rose 39
points, but the nasdaq added 15, the s&p up nearly five. >> reporter: i'm erika miller in new york. coming up tonight, we'll talk to the c.e.o. of kitchen store sur la table and get his outlook for holiday sales. >> tom: lots of theatrics today, but few visible signs of progress in washington towards a fix for the fiscal cliff. the only hopeful sign is that republicans and democrats are talking privately again. but they haven't worked out any of the big issues, including what to do about the nation's debt limit. washington will hit its borrowing limit early next year, darren gersh has the latest. >> reporter: sitting around the kitchen table with a middle class family in virginia, the president once again pressed for congress to avoid the fiscal cliff. >> if this family has a couple of thousand dollars less to spend, that translates into $200 billion of less consumer spending next year. and that's bad for businesses, large and small. >> reporter: behind the scenes, the two sides are talking again. but there was no progress in public.
senators today fought over the debt limit, and ended up deadlocked over a bill to allow the president to automatically increase borrowing. >> he's shown what he is really after is unprecedented powers to spend taxpayer dollars without any limit at all. >> reporter: if the debt limit isn't raised, the country can't pay for the spending congress has already approved. and economists say the nation pays a high price for this kind of brinksmanship. >> business people aren't going to engage unless they have clarity with respect to this thing. >> reporter: but few insiders expect to find much clarity from washington in the coming weeks. darren gersh, nbr, washington. >> susie: investors will beor mn those fiscal cliff talks, and they will also be studying tomorrow's importa")jé:0@6cj& but josh feinman says the november numbers won't give an accurate picture of the labor market. he's chief economist at d.b. advisors. >> reporter: hi, josh, so you're talking about distortions in that report. tell us more. >> yes, hi, susie.
i think that the hurricane sandy may distort the numbers. we've seen it in some of the othehigh frequency data in the last couple of weeks. keep in mind tomorrow's labor market report will report on a snapshot of the labor market taken in the middle of last month. and that's when the hurricane and its aftermath were having their effects. >> so the consensus numbers from a survey of economists, they're expecting american businesses added 110,000 jobs it to their payroll. the unemployment rate staying around 7.9%. does that sit right with you. is that what you are seeing? >> probably somewhere around that maybe a little less. one of the problems is it is harto gauge exactly what the impact of the storm will have. we know it's transitory, it's hard to say exactly how much numerically it will sub tract. if the number comes in lower than that i think a lot of people will say oh, it was probably the effect of the hurricane and they'll wait until the following month to see what kind of a rebound we get. >> let's talk a little bit about what we can expect
from the job market going forward. i don't know if you saw alan blinder's op ed piece in "the wall street journal." the former fed governor saying if we go over the fiscal cliff the unemployment rate wl jump recession and customarily when are you in a recession the unemployment rate goes up 3 percentage points. does that sound right to you. and if that is the case what does this mean for consumers and for businesses? >> well, the seriously bad news. but i think what is important is not just whether we go over the cliff but how long we stay over there. i mean if it turns out that they need a couple more days to hammer out an accord i don't think that will have a big lasting effect. but if we go over the cliff and all those spending cuts and t hikes go into effect and stay in effect for the whole year, then you would be talking about a very high likelihood of a recession and rising unemployment, substantial rise, we can quibble about how much. but it would be seriously bad news for consumers and
businesses. >> as you know the federal reserve is going to be meeting next week on tuesday. certainly this is all going to be a topic around the table. is there a role for the federal reserve in this fiscal cliff back and forth? >> there really isn't a direct role they can play. this is fiscal policy. the fed does not make miss call policy t makes monetary policy. i think chairman bernanke and others have been very clear to stay out of the battle that has to be resolved by the congress and administration. look, i think at the end of reach some sort of an accord to avert the most draconian aspects of the fiscal cliff. maybe the 11th, 12, 12th or 13th hour but i think they will reach that because i think they recognize that the consequence its of not doing so are so severe. >> but let's face t that even if there is a deal we're talking about an economy that is going to have to deal with people having higher taxes and dealing with spending cuts. what are you projecting for what are you projecting qlu ha,
for economic growth and unemployment. >> sure. i think the economy going to be facing some fiscal drag from the federal side but if it is phased in slowly, it's not really use ter and abrupt i think it can handle it because i think the private sector is healing and i'm looking for improvement in growth for the second half of the year provided that we don't hit a landmine here on the fiscal side. >> all right, josh, thanks some of. we've been speaking with josh feinman of db advisor. >> tom: nearly a month and a half after super-storm sandy wreaked havoc along the new
jersey shore, president obama met today with governor chris christie at the white house. the topic-- federal aid for storm recovery. the president is expected to ask congress for about $50 billion in additional emergency assistance. ruben ramirez is in seaside heights, new jersey, where business owners are striving to recover. ruben? >> reporter: thanks, tom. yes, nearly six weeks after super-storm sandy devastated this barrier island off the coast of new jersey, there's still a curfew in place. a lot of the traffic you see behind me is a lot of those longtime residents from the island and business owners who have bn going back day in and day out, trying to recover and repair whatever's left. some of those business owners we had a chance to speak to today. they say they'll reopen come next summer. >> you've kbchb in business 33 years, have you seen this sort of devastation before. >> no, nothing like this. we-- that's the reason we stayed because they were explaining that there was going to be a terrible storm. but we, of this magnitude we had no idea. this is just like -- hard to
believe. >> here we are almost six weeks after the storm hit. how soon until you get the business open and up and running again? >> there's a few problems. electrical and structural. but hopefully in the next maybe two months we might be able to get open again. but definitely we will be open for the summer season. >> reporter: tom, some of those small-business owners we spoke to say they didn't have flood insurance because they say the summer season is short here and the insurance is just too expensive. tom. >> tom: thanks, ruben, will you >> tom: thanks, ruben. we have more on how insurance companies manage risk when it comes to natural disasters.÷ learn about catastrophe modeling oouweb te, nbr.co just look for the "nbr-u" tab.
>susie: amerins were feeling a little richer recently, thanks to gains in real estate and the stock market. the federal reserve said today that household net worth rose to nearly $65 trillion between july and september. that's up nearly $2 trillion from the previous quarter. net worth is total assets, like homes and stock portfolios, minus liabilities like mortgages and credit card debt. that wealth effect could make consumers feel more comfortable about shopping this holiday season. there are still 20 days before christmas and the rush is on. toys are always popular gift items. but there's one category that's expected to do even better and, no, it's not electronics. erika miller reports. ♪ ♪ó'2e÷ >> reporter: for many families, the holidays are all about the home. few retailers know that better
than sur la table, a 104-store chain selling kitchenware and tabletop items. c.e.o. jack schwefel says sales are off to a strong start, and credits changing american values. >> i think americans are realizing the importance of the family meal, where people get together. no matter how crazy the day is, you can have that moment every day where it becomes the most important moment of the day, and you share it with the people you love the most. >> reporter: unlike many retailers, sur la table says it hasn't had a problem with showrooming this holiday season. that's when people come in to browse, but purchase cheaper versions online. part of the reason is that 40% of the store's products are exclusive. >> one of the things that we are most proud of is the fact that we still import more product from europe than we do from china. so you are talking about artisan product, product that has a story to it. that's special. you don't see that in retailing in america. >> reporter: stores like sur la table are expected to be one of
the few bright spots in an otherwise lackluster holiday season for merchants. in fact, some experts think home goods will be hotter than toys this holiday season. ibm projects home goods will see the strongest sales growth this year, up over 6%. that's far more than toys and electronics. >> you may ask yourself, why home? we think home is up because of a lot of things-- things like the changing demographic of the home itself. there's a stat that says that 41% of those between 25 and 29 are living back at home. >> reporter: but there also a second reason. >> we think that this holiday people are buying what they need vs. what they want. >> reporter: which had me wondering what's on jack schwefel's wish list this holiday season. it wasn't this $5,500 coffee maker. >> there are some new knives that i'm actually pretty excited about, so probably those. they're cutting board material actually used in the handle of the knives. >> reporter: and there's no denying it will look good sur la table at this holiday season.
erika miller, nbr, new york. >> a lot of people are buying new housewares, i love qooking. >> tom: i do i think is great the house goods category is seeing good growth it says there is confidence in the house market but let's face it, just because it's home goods doesn't mean it's cheap or inexpensive. 5500 dollar coffeemaker, some of these home appliance blernds can be $500. >> susie: if are you looking for discounts now there is green monday. we have had black friday, cybermonday, green monday is the second monday in december and that's when there is allots of discounts on-line. so it will be good for consumers. >> tom: we've been talking about the fiscal cliff but i think there is the holiday cliff which is that game of chicken between stores are they going have to discount closer to the holidays or are consumers going to spend the money that the stores are asking for right now. clearly another indication that stores perhaps maybe getting nervous now. >> susie: speak of green there was green on wall street today. >> tom: some buying on wall street. let's look at our market focus.
better than expected data on fir-timenemployment claims ledo a oppy srt for the s&p 500. after apple went positive in the 10:00 a.m. eastern time hour, so did the index. as tech stocks turned solidly higher, so did the market, finishing up a third of a percent. trading volume was moderate at 616 million shares on the big board; just over 1.7 billion on the nasdaq. the technology sector led the way, up eight tenths of a percent. the consumer discretionary sector added six tenths of a percent. the big tech names in the dow industrials weren't left out. intel had the biggest percentage gain of dow stocks. shares were up 1.6%. c.e.o. paul otellini said intel could manufacture semiconductors for otr chipmake "for the right types of products." so, queue the rumors about intel possibly making chips for apple. cisco systems moved up 1.4%. the move takes shares to their highest price since september. the top tech sector stock was akamai technologies. akamai helps speed up and manage online content and traffic.
a new partnership with at&t led to today's rally. shares jumped 10% on heavy volume. analysts say the deal turns at&t from a competitor of akamai's to a customer, eliminating the rival from akamai's business. the consumer side, starbucks was hot. first, the company said it will pay more taxes in britain in the next two years. yesterday, the company said it will open at least 1,500 new stores in the u.s. over the next five years. starbucks said the market is not saturated shares jumped 5.7%. volume tripled with the stock closing at five month highs. tax prep giant h&r block sits at a new 52-week high tonight. it lost less money than feared last quarter. h&r block has been cutting costs to focus on its core tax preparation business, especially digital tax prep. even satellite radio operator sirius/xm radio can't resist returning some of its cash to shareholders. it announced a one-time dividend of a nickel per share and a $2 billion stock buyback plan. sirius shares are consistently
among the most actively traded issues on the nasdaq. volume was very heavy today, but the stock didn't move much, up just two cents. but there was a bigger stock move in liberty media capital. liberty media is the biggest shareholder of sirius and stands to get $160 million thanks to the special dividd. online social gaming company zynga has struggled to repeat the success of its farmville and words with friends games. it filed a preliminary application for a gaming license in nevada. don't look for zynga on the strip, at least not yet. the company wants to have customers bet real money on games like zynga poker. shares rallied 7.1% as volume doubled. zynga has lost more than 70% of its value since becoming a publicly traded company. all of the five most actively traded exchange traded products were higher with the emerging markets fund up the most. and that's tonight's "market focus." >> susie: one of the hedge funds embroiled in the fbi's crackdown on insider trading is closing its doors.
diamondback capital management is shutting down after clients pulled more than half a billion dollars from the fund. federal agents raided the connecticut firm two years ago as part of a nation-wide sweep that resulted in the arrest of one of the firm's former portfolio managers on insider trading charges. since then, diamondback's assets have dwindled to just over $1.5 billion, down from $5 billion. >> susie: our viewers have been waiting and he's finally here. paul kangas, nbr co-founding anchor. welcome home, it's so nice to you have back here. >> well, it is like home.
and great to hear that i'm still welcome. >> susie: actually, speak of welcome. we got-- tom and i got so many viewer questions for you and comments saying it that they want to hear from the walter cronkite of financial news. a little bit of your wisdom in these confusing time, right, tom. >> narrator: absolutely there is some of going on in the market an you've seen some of market cycles. we have a lot to talk about but what we have to ask what do you make of the stock market today. >> it's sort of a stop and go affair. we get good news one day, better building permits and building news it and on that front. and inflation is down a little bit. and then the next day it's all countered by new uprisings in egypt and one thing or another. so the market tries to step higher and is countered by bad news. so stop and go all the way. >> tom: we got a great question from eric p edison. you saw the dow industrials move from 1,000 to over
10,000 in your ca reeferment and he asks will the dow jones see 8,000 or 18,000 first? >> well, there's not that much volatility but it could see both in the same year. but i intend, i'm actually a little on the bullish bias because corporations continue to make money and the american people are basically optimistic. and a lot of stocks are underpriced particularly blue chips even though the dow industrial average has more than doubled since 2009ment but there's a reason for that and that's good easternings, and that's good dividends. >> well, there's a lot of questions about if that is going to continue. and one of our viewers has a question for you about the fiscal cliff. you know all about the back and forth and drama about the fiscal cliff and delores wants your thoughts on where do you stand on this whole fiscal cliff, how will it play out. >> congress better get off its duff and do something.
and i think that finally the pressure will be on us. but they always do it right to the last, you know, minute. but i think it's got to happen or they're going to be ousted from their hallowed political seats. >> tom: you could argue in the three years you've been away from the nbr anchor desk congress hasn't done a lot to address the fiscal situation. >> no it's just ridiculous. i mean these are our elected representatives and they have got to pay a little more attention to those that got them in the office. and they're arguing amongst themselves without much care about the people they represent. >> tom: a lot of those folks are retiree, we have a question from anita asking what is the investing or financial planning lesson paul use most during retirement? >> well, the number one is hope i can live my life to the last and still have enough capital to keep me going. and a lot of investors are running up against the same
thing. they're running out of capital because yields are so low in the bond market, money markets are yielding practically nothing. so they have to chip into their base capital and that is hurt. so what i am doing is looking for blue-chip stocks with decent dividends. >> susie: a lot of people are wondering that in this climate what do you think is going to be the new investment opportunity available to all of us in 2013. s this's a question from fay. >> new investment opportunity. >> susie: what is your prediction. >> they'll come up with something new like etf exchange traded funds were relatively new a few years ago and now have gained such popularity t is almost staggering how much money has gone into etfs. >> tom: you mentioned how volatility could have the do you see 8,000 and 18,000, tweet on½kvyññ=) twitter asking individual investors are afraid of the
markets. what needs to be done to gain their confidence? >> less regulation. i think that investors are afraid that they make an investment and something comes along,u.r the rules change from what got them into the investment in the first place. when you can't change, you know, canoes in the middle of a stream. >> susie: on this subject of investor confidence we do have a question from billy who says what is the greatest chans you've seen in the market today. you've had perspective three years being away from it on a day-to-day basis. what do you see is the biggest change? >> well, billy, i'll tell you that the computer is a wonderful thing but it's not the greatest thing for investing. and for investors who don't have a high speed company ability and have large box of stock at their arms length. i think that that is, it's taken away the idea that long-term, long-term investing is a good thing.
i think that's one of the changes that i don't like. too much computer meddling. >> tom: well, paul, as much as the markets have changed, you haven't. it's great to see and hear from you again. susie, we have to say good night but i think it's only procedure to ask paul. >> i'm paul kangas, wishing all of you, the best of good-byes. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org
>> join us anytime at nbr.com. there, you'll find full episodes of the program, complete show transcripts and all the market stats. also follow us on our facebook page at bizrpt. and on twitter @bizrpt. >> tom: i'm tom hudson with an nbr news brief. apple will return some of its computer manufacturing to the u.s.
c.e.o. tim cook said the company will invest $100 million, about 1% of what it spends on factories, to make one line of its mac computers in america. new claims for jobless benefits fell by 25,000 in theeek ending december 1 to a lower than expected 370,000 requests. on wall street today, the dow rose 39 points, the nasdaq added 15, the s&p up nearly five. tomorrow, we'll talk to three small business c.e.o.s who are hiring, and find out how they're helping to chip away at the unemployment rate. and our friday "market monitor" guest says there are four things that could lead to a better economy in 2013. he's mark luschini of janney montgomery scott. for more financial news, tune in to nbr weeknights on this public television station.